As is often the case with oral contracts, the details of what was agreed were hotly disputed by the two sides.

Mr White said he had entered into an agreement with the two businessmen to run a restaurant. He was to receive a 38% shareholding in return for the use of his name in relation to the restaurant. He later withdrew permission for his name to be used claiming that the businessmen had refused to transfer the 38% shareholding to him.

He considered this refusal to be a repudiatory breach of contract for which he should receive damages.

The two businessmen submitted that there was no concluded contract, and that Mr White’s case ignored the fact that an essential part of the agreement was that the restaurant would be entitled to use his name.

The court found in favour of the two businessmen. Mr Justice Morgan said he was unable to accept large parts of Mr White’s evidence. His account in relation to the use of his name was particularly unreliable as he had given evidence in cross-examination that was in line with the case put forward by the other side.

The court held that there was no binding contract as Mr White alleged. He was ordered to pay costs of £240,000. Mr Justice Morgan went on to say: “Mr White has been a bit of an idiot. He’s brought utterly misconceived proceedings.”

Whatever the rights and wrongs of the case, it does illustrate the kind of disputes that can arise out of oral contracts as opposed to properly drawn up written agreements.

Please contact us about the issues raised in this article or any aspect of contract law.

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